Elior cuts guidance after Italy provision (updated)

Elior SA

20/05/2026 17:56

Recasts throughout in the news bulletin format. Adds CFO quotes paragraphs 7 and 10.

May 20 (Reuters) - French food caterer Elior Group ELIOR.PA on Wednesday cut its full-year guidance after weaker first-half earnings were hit by a contract dispute in Italy, underscoring pressure from slow contract starts and stubborn cost inflation.

Elior booked a 25 million euro ($28 million) provision tied to a pricing dispute with an Italian rail operator, which weighed on first-half results. Delayed contract ramp-ups and persistent inflationary pressure led it to lower its outlook for the year.

Revised 2026 full-year organic revenue growth guidance of 1% to 2%, from 3-4% previously, and adjusted core profit margin of 3%, below the prior range of 3.5% and 3.7%

Adjusted earnings before interest, taxes, and amortisation (EBITA) fell to €95 million from €132 million a year earlier, with margin dropping to 3% from 4.1%

25 million euro provision covers losses to completion on a catering contract with an Italian rail operator, running until end-April 2027. Excluding that item, adjusted EBITA margin was 3.9%

First-half revenue of €3.18 billion ($3.70 billion), organic growth of 1.3%

New contract wins involve large accounts which will require longer implementation phases and will generate revenue only after the summer, CFO Didier Grandpré told journalists

Revised leverage ratio guidance of around 3.5 times at end-September 2026, up from a prior target of around 3 times, but well below the 4.5 times covenant threshold

Free cash flow of 9 million euros in H1, down from 205 million euros a year earlier, reflecting seasonal working capital outflows and a billing delay in cleaning operations

CFO Grandpré flagged a less favourable working capital outlook for the second half, citing temporary collection risks tied to France's electronic invoicing reform taking effect in September

($1 = 0.8604 euros)

 (Reporting by Dimitri Rhodes in Gdansk; Editing by Matt Scuffham)

 ((Dimitri.Rhodes@thomsonreuters.com))